What Is The Importance Of GAP Insurance In An Auto Accident? Florida Car Accident Attorney Explains

June 4, 2019

Do you own your car? You better make sure you have GAP Insurance if you still owe money on it! Watch this video......

When we have clients who get into a car accident with a car that they own, one of their biggest questions is what they should do about the damage to their car - especially if it's totaled.

One of the first things we address is whether the client has gap insurance. Gap insurance is for situations such as a car is officially totaled and deemed unable to be fixed, or not worth fixing. Many people get their car damaged but might still owe money on their car.

For example, let's say you own a 2018 Toyota Camry, but you still owe $8,000 on it at the time you get into a Florida car accident. Imagine your car is totaled in an accident that's not your fault. And the driver who hit you, what if their insurance company says that your car is only worth $6,000? That means you have a $2,000 shortage with what you owe and what the insurance company will pay you.

THIS is where gap insurance comes in. Gap insurance, given its name, fills in the "gap," the difference between what the insurance company is giving you vs. what the car's outstanding loan balance is. Unfortunately, the bank your loan is with doesn't care that the insurance gave you only $6,000 - they still need you to pay the rest of your $8,000 loan. Conversely, the insurance company doesn't care if you still owe $8,000 if the value of your car was only $6,000 at the time of the accident.

This is the importance of gap insurance, so we recommend that you get gap insurance on your policy especially if you buy a new car since the new car's value diminishes greatly immediately once you drive off the lot. So if you get into an accident a few months after buying a new car, you likely will not get enough money from insurance to pay off your auto loan.

If you want to learn more:
- https://rosenberglawfirm.net/library/the-importance-of-gap-insurance-in-an-auto-accident.cfm
- https://rosenberglawfirm.net/practice_areas/florida-car-accident-lawyer.cfm
- https://rosenberglawfirm.net/faq.cfm